UK: Greene King pleased with smoke-free Scottish pubs
Greene King stated that its pubs and breweries had performed to plan in the year so far, with last year's Scottish smoking ban denting sales less than expected, Reuters posted on January 29.
The 205-year-old brewer of Abbot Ale and Old Speckled Hen said its tenanted pubs had increased like-for-like sales by 1.3 percent in the first 36 weeks of its financial year, while the pubs its manages itself raised sales by 3.4 percent.
Scotland banned smoking in public places in March 2006, and England and Wales are due to follow suit in July.
"In this first winter of the Scottish smoking ban, high street pubs, and those with outside areas, have continued to do well -- food has grown strongly, whilst liquor sales are down," said Greene King.
Retail sales at its Scottish Belhaven division fell 2.8 percent during the period, less than expected when it bought Belhaven in 2005, it added. Greene King shares were unchanged at 1073 pence at 9:30 a.m. British time.
Analysts at Altium Securities said, "Whilst this statement suggests that sales are in line with expectations, this current trading update lags that of Marston's, released last Friday." Marston's managed pubs reported like-for-like sales growth of 7 percent.
They said Greene King shares were fully valued at a multiple of 11.3 and reduced their target price to 1100 pence from 1300. Altium also downgraded its recommendation of the stock to "hold" from "add". Sales of Belhaven Best ale rose 4.7 percent, while the rest of Greene King's beers also grew strongly.
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